TESCO underlined its dominance of the retail sector today by reporting annual profits of é2.21 billion - a jump of almost 17% on a year earlier.

The latest improvement included a 10.7% rise in total sales at its UK stores, even though the company said it had been a "more challenging year".

Tesco also revealed plans to boost its firepower by raising up to é5 billion from the reorganisation of its property portfolio over the next five years.

The retailer, which overtook Sainsbury's as the UK's biggest supermarket chain in 1995, took é32.7 billion in sales from shoppers in its domestic market during the 12- month period to the end of February.

That represented an increase of 7.5% when the impact of new store openings was stripped out.

However, Tesco indicated a recent slowing in its growth after the like-for-like figure eased to 4% in the final seven weeks of the year.

That reflected a weaker performance in January but the rate of growth picked up in February and again in the early weeks of the current financial year.

Operating profits from the UK rose 15% to é1.79 billion in the full-year period, as the chain overcame the impact of rising energy cost and business rates through better cost control and productivity. International sales were up 23%.